BG Group will today hold a presentation in London for investors and analysts on the Group's LNG business. The event will be hosted by Frank Chapman, Chief Executive, with a presentation by Martin Houston, Executive Vice President and Managing Director North America, Caribbean and Global LNG.

Key points from the presentation

• BG has identified LNG as a key area of investment with significant
  opportunities for adding substantial shareholder value;
  
  

• BG is focused on accessing high value markets in North America and Europe;
  
  

• BG's track record demonstrates the commercial and technical skills needed to
  continue to lead LNG developments in the Atlantic Basin;
  
  

• By 2007, BG expects to be the largest participant in the Atlantic Basin in
  terms of the aggregate of volumes of LNG contracted for import and export.

Speaking today, BG Chief Executive Frank Chapman said: "BG's competitive advantage stems from being an integrated player, with the capabilities necessary to play anywhere along the gas chain in order to create and capture value. In LNG, our focus on gas and our clarity in seeing how markets are growing has allowed us to move early so that we can take advantage of the expected increase in demand for LNG in the supply mix of some of the world's leading industrialised countries. We are confident that our LNG business will continue to grow as a significant contributor to the Group's earnings".

New information

UK

BG has signed a Memorandum of Understanding with Petroplus to take a 50% interest in an LNG terminal at Milford Haven and to take 2.2 million tonnes per annum of capacity.

Egypt

• BG is considering sourcing LNG from the Damietta LNG project in Egypt;
  
  

• At the end of October, construction of Egyptian LNG Train 1 was 45% complete against a schedule of 30% and Train 2 was 25% complete;

USA

• BG expects to deliver more than 100 cargoes of LNG to the United States in 2003;
  
  

• Lake Charles' average LNG send out in the year to date has been 765 million standard cubic feet per day, representing 1.0% of daily US gas demand;
  
  

• By the end of September, BG had been responsible for 62% of all imports of LNG into the United States this year;
  
  

• Following a release of capacity by Duke Energy agreed yesterday, BG will have access to 100% of the capacity at Lake Charles from 1 January 2004.

Financial

• By 2007, around 20% of BG's equity gas production will be monetised via its LNG schemes, an increase of almost two and a half times over today's position;
  
  

• At Henry Hub prices of between $2.50 and $3.50, BG expects long-term LNG purchase contracts typically to deliver ex-ship prices of 80-85% of Henry Hub;
  
  

• As an illustration, BG estimates that, at mid-cycle prices, purchased LNG generates a net present value equivalent to 45% of that created by equity gas monetised through LNG;
  
  

• BG estimates that the future differential between the prices achieved
  currently at Lake Charles and Henry Hub will reduce from the current level of around 15 cents per million British thermal units (mmbtu) to nearer 10 cents per mmbtu.